Hello tutor answer with step by step don't use ai A firm has a market value equal to ns book value Currently, the firm hasexcess cash of s800, other assets of $5.200, and equity of $6.000 The firmhas 600 shares of stock outstanding and a net income of $500. The firmhas decided to spend half of its excess cash on a share repurchaseprogram How many shares of stock we be outstanding after the stockrepurchase is completed?a. 580 sharesb. 600 sharesc. 520 sharesd. 560 sharese. 540 shares

To determine the number of shares outstanding after the firm's share repurchase, we start by…

Answered: A firm has a market value equal to ns…

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter14: Distributions To Shareholders: Dividends And Repurchases

Section: Chapter Questions

Problem 2STP

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ed A company has the following balance sheet (market values): Liabilities + Equity Debt Equity Assets Cash Operating Assets 600 1000 400 1200 If the firm has 300, find its fair share price after it repurchases 100 worth of shares: (round your answer to the nearest 0.01)
S Examine the following book-value balance sheet for University Products Incorporated. The preferred stock currently sells for $15 per share and pays a dividend of $3 a share. The common stock sells for $10 per share and has a beta of 0.9. There are 4 million common shares outstanding. The market risk premium is 8%, the risk-free rate is 4%, and the firm's tax rate is 21%. Assets Cash and short-term securities $ 3.0 Accounts receivable. 3.0 Inventories Plant and equipment Total 7.0 25.0 $ 38.0 a. Market debt-to-value ratio b. WACC BOOK-VALUE BALANCE SHEET (Figures in 5 millions) Liabilities and Net Worth Bonds, coupon 5%, paid annually (maturity 10 years, current yield to maturity = 7%) Preferred stock (par value $20 per share) Common stock (par value $0.10) Additional paid-in stockholders' equity Retained earnings Total a. What is the market debt-to-value ratio of the firm? b. What is University's WACC? Note: For all the requirements, do not round intermediate calculations. Enter your…
Entity X distributed a dividend of $ 50 per share last year. If the business is expected to distribute the same amount of dividends in the following years and the minimum return rate expected by the investors is 25%, what is the real value of the stocks of the X entity? a) 36 b) 48 c) 100 d) 200 e) 64
Oweninc has a current stock price of $13.70 and is expected to pay a $1.00 dividend in one year. If Oweninc's equity cost of capital is 11%, what price would Owenlnc's stock be expected to sell for immediately after it pays the dividend? OA. $11.37 OB. $15.21 OC. $9.95 OD. $14.21 www
assume an analyst has valued a stock at $59.75 per share. What was the NPV of the firm if there are $ 3,500,000 shares outstanding and athe market value of the debt is $24,000,000
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8.An investor purchased 100 shares of common stock at GH¢20 per share one year ago. The company declared and paid a dividend of GH¢2 per share during the year. The investor sold the stock for GH¢21 per share after the one-year holding period. a.Calculate the HPR for this investment Partition the HPR into dividend return and capital appreciation return .
BK Corporation has a value of operations equal to P2,100, short-term investments of P100, debt of P200, and 100 shares of stock. If BK converts its short-term investments to cash and repurchases P100 of its stock, what is the resulting estimated intrinsic stock price and how many shares remain outstanding?
Suppose Summa Industries and Cumma Technology have identical assets that generate identical cash flows. Summa Industries is an all-equity firm, with 12 million shares outstanding that trade for a price of $16.00 per share. Cumma Technology has 18 million shares outstanding, as well as debt of $57.60 million. a. According to MM Proposition I, what is the stock price for Cumma Technology? b. Suppose Cumma Technology stock currently trades for $10.74 per share. What arbitrage opportunity is available? What assumptions are necessary to exploit this opportunity?
A company has the following book value in capital structure:GHSMEquity capital (in shares of GHS 10 each, fully paid-up at par)1511% Preference capital (in shares of GHS 100 each, fully paid-up at par)1Retained earnings 2013.5% Debentures (of GHS 100 each)1015% Term Loans12.5The next year expected dividend on equity shares is GHS 3.60 per share and the dividend per share is expected to grow at 7% into the foreseeable future. The market price per share is GHS 40. Preference stock, redeemable after 10 years is currently selling at GHS 75 per share. Debentures, redeemable after six years, are selling at GHS 80 per debenture. The income-tax rate for the company is 40%Required Calculate the weighted average cost of capital of raising new capital.
The following financial information is available on Raytheon Technologies: Current per share market price: $225.00 Current (t = 0) per share dividend: $28.00 Expected long-term growth rate: 8.50% Raytheon Technologies can issue new common stock to net the company $205.00 per share. Determine the cost of external equity capital using the dividend capitalization model approach. 22.16% 20.94% 23.32% 22.00%
round to the nearest cent

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